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Markets Outlook: Earnings inspired trade to sway key share index
Monday, 13 January 2003, 20:30 IST
MUMBAI: A raft of quarterly corporate earning announcements will dominate the Indian bourses in the week ahead with operators scrutinising the financial numbers of blue-chip companies before finalising investment decisions.
The October-December quarterly corporate earning season, which started last week with tech bellwether Infosys Technologies announcing its results, will gather steam in the days ahead.
A host of new as well as traditional companies such as Wipro Ltd., Tata Engineering and Satyam Computer Services will unveil their quarterly results over the next couple of weeks.
Most analysts and investors look to blue-chip companies' performance as an indicator of the industry's health.
"The corporate result is the only factor that will have a major influence on the trading pattern over the next couple of weeks. The investors are awaiting for some positive direction," said a fund manager with a foreign brokerage firm.
"If financial numbers of some of the blue-chip companies manages to live up to the market expectations then we will see a sustained rally in the short to medium term on institutional buying.
"But lower-than-expected performance may, on the other hand, trigger a profit booking, pushing the benchmark index in the negative zone," the fund manager told IANS.
The market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed the week Friday at 3,358.99, netting a negligible gain of 1.45 points or 0.04 percent over its previous week's close.
Analysts say the government's decision on privatisation of two state-run oil giants - Hindustan Petroleum Corporation Ltd. (HPCL) and Bharat Petroleum Corporation Ltd. (BPCL) - may also affect the market mood in the week ahead.
The government is awaiting a legal view on the sale of HPCL and BPCL. The privatisation of the two firms has been hanging fire for last four months due to intense political squabbling within the ruling coalition.
"If the government manages to obtain legal opinion on the privatisation of HPCL and BPCL next week, it would greatly boost the investor sentiment on the public sector counters," said a broker with the Bombay Stock Exchange.
In the intra-week trade ended Friday, the market opened the week sharply lower as investors booked profit on heavyweight counters ahead of the announcement of some crucial quarterly corporate results.
Traders said that the market mood was also dampened by lack of large-scale buying by foreign institutional investors, who were expected to sharply step up their investments with the beginning of the year 2003.
It, however, staged a recovery in the intra-day trade on speculation that some of the leading technology firms would manage to better market expectations on increased outsourcing by overseas clients.
The market also ignored the Global rating agency major Standard and Poor's decision to retain the negative outlook and junk rating status on India due to the swelling debt burden of Asia's third largest economy.
The agency had lowered its rating on India's local currency denominated debt to 'junk' in September last year.
Indian stock investors resorted to heavy selling in technology shares Friday, pulling the index 0.7 percent lower, after the quarterly result of Infosys Technologies failed to meet market expectations.
Infosys Technologies, India's second largest software exporter, fired up the earnings season by announcing its numbers Friday.
Its October-December quarterly earnings grew 24.4 percent on increased outsourcing by overseas clients.
The company's net profit touched 
2.56 billion in the quarter ended December 31, 2002, up from 2.06 billion during the same period last year, as the tech bellwether increased spend on sales and marketing.
The Nasdaq stock exchange-listed Infosys' third quarter financial numbers, however, failed to meet market expectations. As a result, the shares of Infosys fell as much as five percent in the early trade on the Bombay Stock Exchange.
The Infosys counter ended with a loss of 7.6 percent from its previous week's close at 4,436.10. It had jumped about 40 percent Since October on hopes it would post sharply higher profit in the third quarter on increased outsourcing.
Shares of cement companies staged a smart rally on reports that the industry clocked a 14-percent year-on-year growth in dispatches in December 2002, the highest in recent months.
Gujarat Ambuja Cements rose 0.6 percent over its previous week's close to 165.80 and Grasim Industries ended 1.6 percent higher at 313.
Source: IANS
2.56 billion in the quarter ended December 31, 2002, up from 2.06 billion during the same period last year, as the tech bellwether increased spend on sales and marketing.
The Nasdaq stock exchange-listed Infosys' third quarter financial numbers, however, failed to meet market expectations. As a result, the shares of Infosys fell as much as five percent in the early trade on the Bombay Stock Exchange.
The Infosys counter ended with a loss of 7.6 percent from its previous week's close at 4,436.10. It had jumped about 40 percent Since October on hopes it would post sharply higher profit in the third quarter on increased outsourcing.
Shares of cement companies staged a smart rally on reports that the industry clocked a 14-percent year-on-year growth in dispatches in December 2002, the highest in recent months.
Gujarat Ambuja Cements rose 0.6 percent over its previous week's close to 165.80 and Grasim Industries ended 1.6 percent higher at 313.
Source: IANS